Item 1.01 Entry into a Material Definitive Agreement.
On December 29, 2022, Eos Energy Enterprises, Inc. (the “Company”)
and YA II PN, LTD (“Yorkville”) entered into Amendment No 3. (“Amendment No. 3”) to the Standby Equity Purchase
Agreement dated as of April 28, 2022 (as amended, the “SEPA”), to (i) decrease the commitment amount under the SEPA from $125,000,000
to $75,000,000; and (ii) reinstitute the Exchange Cap (as defined in the SEPA), which amounts to 19.99% of the outstanding shares of common
stock immediately prior to entering into Amendment No. 3 and applies to all subsequent issuances of common stock under the SEPA, together
with any issuances of convertible promissory notes issued by the Company to Yorkville as a pre-advance loan pursuant to Section 2.05 of
the SEPA. The Exchange Cap does not apply (a) if the Company’s stockholders have approved issuances in excess of the Exchange Cap
or (b) to sales of shares of common stock under the SEPA at a price that equals or exceeds $1.08 per share (which represents the lower
of (x) the Nasdaq Official Closing Price on the Trading Day (each as defined in the SEPA) immediately preceding the date of the Amendment
No. 3; and (y) the average Nasdaq Official Closing Price for the five Trading Days immediately preceding the date of Amendment No. 3);
provided that, in the case of clause (b), the average price of all applicable sales of shares of common stock under the SEPA after the
date of Amendment No. 3 thereto equals or exceeds $1.08 per share. With the exception of the foregoing description of Amendment No. 3,
the terms of the SEPA remain unchanged, and the SEPA, as amended, remains in full force and effect.
The foregoing description of Amendment No.
3 does not purport to be complete and is qualified in its entirety by reference to the full text of Amendment No. 3, a copy of which is
filed with this Current Report on Form 8-K as Exhibit 10.1 hereto and is hereby incorporated by reference.
Supplemental Agreement to the SEPA and
Promissory Note Issuance
On December 29, 2022, the Company issued and
sold a convertible promissory note with an aggregate principal amount of $2.0 million (the “Promissory Note”) in a private
placement to Yorkville under a supplemental agreement dated as of December 29, 2022 (the “Second Supplemental Agreement”)
to the SEPA between the Company and Yorkville.
The Company agreed to use the proceeds from
the sale of the Promissory Note for working capital and other general corporate purposes or, if different, in a manner consistent with
the application thereof described in the Company’s prospectus relating to the SEPA filed with the Securities and Exchange Commission
on April 28, 2022 and included as a part of the Company’s Registration Statement on Form S-3 (File No. 333-263298).
The Promissory Note has a maturity date of
June 29, 2023 (the “Maturity Date”) and was issued with a 2% original issue discount. Interest shall accrue on the outstanding
principal balance of the Promissory Note, beginning on the 29th day following the date of issuance, at an annual rate equal to 5.0% unless
and until there is an event of default, upon the occurrence of which, interest shall accrue at a rate of 15% per year until collected
in full. The Promissory Note is convertible into shares of the Company’s common stock at a conversion price equal to the lower of
$1.1779 and 96.5% of the lowest daily volume weighted average price of the Company’s common stock during the 7 consecutive trading
days immediately preceding the conversion date (the “Conversion Price”) any time prior to the Maturity Date, subject to the
terms and conditions of the Promissory Note. The Conversion Price may not be less than $0.35 per share (the “Floor Price”).
If the volume weighted average price of the Company’s common stock is less than the Floor Price for five consecutive trading days,
subject to certain limitations, the Company must make weekly payments on the Promissory Note. At any time that there is an outstanding
balance owed under the Promissory Note, Yorkville may, pursuant to the terms of the Supplemental Agreement, require the Company to deliver
an advance under the SEPA for the issuance and sale of common stock at the Conversion Price in order to offset the amounts owed by the
Company to Yorkville under the Promissory Note. In addition, while there is an outstanding balance owed under the Promissory Note, Yorkville
shall use any advance requested by the Company pursuant to the SEPA to offset the amounts owed by the Company to Yorkville under the Promissory
Note.
The foregoing descriptions of the Second Supplemental
Agreement and the Promissory Note do not purport to be complete and are qualified in their entirety by reference to the full text of each
of the Second Supplemental Agreement and the Promissory Note, copies of which are filed with this Current Report on Form 8-K as Exhibit
10.2 and Exhibit 4.1 hereto, respectively, and are hereby incorporated herein by reference.